Earnings Release • Oct 13, 2021
Earnings Release
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Regulated information Nazareth (Belgium)/Rotterdam (The Netherlands), 13 October 2021 – 7.00 am CET
Highlights of Q3-2021
Rafael Padilla, CEO of Fagron: "Fagron's 5.4% turnover growth in the third quarter of 2021 is the result of good developments in both Latin and North America and a decline of the turnover in EMEA due to a combination of factors.
The turnover of EMEA declined 7.8% this quarter. At Compounding Services, the turnover decline was mainly the result of the registration of non-sterile compoundings by third parties in 2020. The decline in the turnover at Brands and Essentials was caused by a combination of the fading demand for COVID-19 related products, slow recovery of elective care and doctor visits, pressure on the supply chain because of the Corona pandemic and slight delay in the commissioning of the repackaging facility in Poland.
Latin America showed turnover growth of 13.3%. Our competitive position continues to improve despite the volatile market environment. With our focus on prevention, we are well-positioned in this region to benefit from the increased demand for lifestyle enhancement products.
North America saw continued strong turnover growth of 20.7% in the third quarter, mainly because of good results at Compounding Services. The expansion of the product range and the conclusion of new contracts at Fagron Sterile Services are bearing fruit and we are on track to realize the turnover target.
The ongoing global vaccination programs will allow further normalization of the markets in which we operate. However, the pace at which this will happen also depends on the development of the Corona pandemic and the consequences thereof for Fagron. With our focus areas we are well positioned to benefit from increased emphasis on prevention and a healthy lifestyle. Furthermore, we remain actively looking at acquisition opportunities, in EMEA and North America in particular.
Based on the above, we expect to realize turnover growth with a REBITDA on the lower end of the bandwidth of between € 118 million and € 124 million for the full year 2021.
During the Capital Markets Day which we are organizing in the first quarter of 2022 we will present a strategic update and medium-term objectives for both the three regions and for Fagron as a whole."
T +31 88 33 11 288 F +31 88 33 11 210 www.fagron.com Page 1 of 6
Key figures by segment
The turnover of Fagron Group increased 5.4% (+4.6% at constant exchange rates) to € 142.4 million in the third quarter of 2021. Organic turnover growth was 3.6% at constant exchange rates.
The table below shows the turnover development and exchange rate effects at Fagron Group in the third quarter of 2021.
| (x € 1,000) | Impact |
|---|---|
| Turnover in Q3-2020 | 135,077 |
| Development EMEA1 | -6,237 |
| Development Latin America | +3,106 |
| Development North America | +7,967 |
| Currency-effect BRL/euro | +765 |
| Currency-effect US\$/euro | -509 |
| Currency-effect other | +795 |
| Contributions of acquisitions | +1,394 |
| Turnover in Q3-2021 | 142,358 |
1 The EMEA segment comprises the Fagron activities in Europe, South Africa and Israel
The turnover of the EMEA segment declined 7.8% (-8.4% at constant exchange rates) to € 59.0 million in the third quarter of 2021. Organic turnover decline equaled 9.2% (-9.7% at constant exchange rates).
The turnover decline at our Compounding Services activities was mainly the result of the registration of non-sterile compoundings by third parties in 2020 (around € 0.7 million in the third quarter of 2021). This impact will be largely gone after this quarter. Fagron has taken measures to minimize a similar impact of future registrations by other parties as much as possible.
The decline in the turnover at Brands and Essentials was caused by the drop in demand for COVID-19 related products and slow recovery of elective care and doctor visits in combination with pressure on the supply chain because of the Corona pandemic and slight delay in the commissioning of the repackaging facility in Poland.
2 The EMEA segment comprises the Fagron activities in Europe, South Africa and Israel
The turnover of the Latin America segment increased 13.3% (+9.6% at constant exchange rates) to € 36.8 million in the third quarter of 2021, supported by growth in all countries.
In this region, compounding pharmacies are Fagron's most important sales channel, and these mostly stayed open notwithstanding the COVID-19 restrictions. Our competitive position continues to improve despite the volatile market environment. With our focus on prevention, we are wellpositioned in Latin America to benefit from the increased emphasis on a healthy lifestyle following the COVID-19 pandemic.
The turnover of the North America segment increased 20.7% in the third quarter of 2021 (+22.1% at constant exchange rates) to € 46.5 million.
The Compounding Services activities in the region reported strong turnover growth of 37.4% (+39.6% at constant exchange rates). Fagron Sterile Services (FSS) in Wichita realized turnover growth of
42.7% (+45.3% at constant exchange rates), partly thanks to the successful launch of new products and the conclusion of new contracts. In September 2021 FSS had a run rate (turnover; annualized) of around US\$ 72 million. Fagron is confident FSS will achieve the long-term turnover target. AnazaoHealth also reported healthy growth in sales of our products, resulting in a turnover increase of 32.6% (+34.5% at constant exchange rates).
Brands and Essentials reported a slight decline in the region in the third quarter (-3.0% at constant exchange rates). In the third quarter of 2020 Brands in particular benefited strongly from the increased demand for COVID-related products, a demand which has now virtually ceased.
Fagron will organize a Capital Markets Day in the first quarter of 2022. Members of the Executive Leadership team will give a strategic update and present medium-term objectives for both the three regions and for Fagron as a whole.
The Capital Markets Day will be held at our premises in Capelle aan den IJssel (The Netherlands) and will be available to attend both in person and online. Further details will be announced later.
Rafael Padilla (CEO) and Karin de Jong (CFO) will elaborate on the results for the third quarter of 2021 at a conference call today starting at 9.30 am CET. In order to take part in the conference call you will need to register beforehand by clicking on this link.
You will be able to call in 15 minutes prior to the start of the conference call using the following numbers and confirmation code:
| Belgium | +32 (0)2 400 60 08 |
|---|---|
| Netherlands | +31 (0)20 531 5821 |
| Spain | +34 911 14 18 08 |
| United Kingdom | +44 (0)20 3365 3209 |
| United States | +1 866 349 6092 |
| Access code | 522457# plus the personal code you will receive after registration. |
The presentation used during the conference call will be available to download from the Fagron website from 9.00 am CET.
Results and trading updates are published at 7.00 am CET.
Karen Berg Global Investor Relations Manager Tel. +31 6 53 44 91 99 [email protected]
Fagron is a leading global company active in pharmaceutical compounding, focusing on delivering personalized medicine to hospitals, pharmacies, clinics and patients in 35 countries around the world.
Belgian company Fagron NV has its registered office in Nazareth and is listed on Euronext Brussels and Euronext Amsterdam under the ticker symbol 'FAGR'. Fagron's operational activities are managed by the Dutch company Fagron BV, which is headquartered in Rotterdam.
Certain statements in this press release may be deemed to be forward-looking. Such forward-looking statements are based on current expectations and are influenced by various risks and uncertainties. Consequently, Fagron cannot provide any guarantee that such forward-looking statements will, in fact, materialize and cannot accept any obligation to update or revise any forward-looking statement as a result of new information, future events or for any other reason.
In the event of differences between the English translation and the Dutch original of this press release, the latter prevails.
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